American Airlines settles with Boeing for 737 MAX compensation

American Airlines Group Inc (AA) said on Monday it had reached a confidential agreement with Boeing Co to address damages the airline incurred in 2019 due to the continued grounding of its fleet of Boeing 737 MAX aircraft.

While the amount of money that Boeing will pay the airline is unknown, AA said the compensation will be received over several years. American Airlines’ also says a $30m portion of the compensation money will be used for the company’s 2019 employee profit-sharing programme. American Airlines is the largest United States airline. 

American said it does not expect any material financial effect of the agreement to be realized in its fourth-quarter 2019 earnings, and it will continue talks regarding compensation for damages related to the MAX grounding beyond 2019.

Boeing said it does not comment on discussions with airlines.

Boeing’s best-selling 737 MAX has been grounded since two fatal crashes in five months killed 346 people. The company is halting production this month. Several airlines have struck confidential settlements with Boeing in recent weeks.